I've had a supplier invoice for several thousand pounds which is zero rated, do I charge the customer having those supplies VAT? Obviously this will have a negative effect on our VAT so I'm thinking that maybe VAT shouldn't be charged to the customer??
If your company is vat registered you must charge vat. Not sure what you mean by having a negative effect on your vat, you are simply collecting vat on behalf of hmrc. So charge it and then it gets paid over (are you on standard accounting or cash accounting for vat?)
Standard accounting, by a 'negative' effect I mean because we aren't getting it back on the related supplier invoice as that is zero rated / exempt, it isn't bringing our period VAT down as it would have done if it was a UK supplier.
Ideally you want to supply and invoice at the start of your new vat quarter to give your customers plenty of time to pay before you have to account for the vat then.
As Rob says, even though no VAT was paid to the supplier you are going to need to charge it.
Although this will obviously not be able to be set off against the supplier you will of course be charging 17.5% on top of your clients markup so your not making a loss on this. The figures just looks a little misleading but the amount that you keep would be the same.
Lets take a simple example (so that even I can understand it).
So, as you can see, in example (1) £1750 goes to the supplier who will pay that on to HMRC and 1750 is paid directly to HMRC.
In example 2 where no VAT was inherent in the initial purchase £3500 is paid directly to HMRC but no VAT element is paid to the supplied.
Using either the net result to your company is the same.
Simples.
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Shaun
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